Unlawful clauses at VME

Unlawful clauses at VME

Additional protection for Associations of Co-owners (VMEs).

On Feb. 8, 2024, the Act containing Miscellaneous Provisions on Economics was approved at the House of Representatives plenary session. The law makes the tort doctrine of economic law (Book 6 WER) applicable to VMEs. The new law aims to protect VMEs, who are responsible for the management and maintenance of common parts in apartment buildings, from unfair terms in contracts with companies.

Consider maintenance contracts for elevators, boilers, fire extinguishers, etc., or agreements where VMEs remain tied to these contracts for too long in the absence of reasonable notice periods or pursuant to automatic renewals of those contracts. Consider agreements with contractors where the contractor's risk is eroded to too great an extent edm. Agreements with disproportionately high damage clauses are also (too) common.

In Belgian law, there are rules that protect consumers, businesses and now VMEs against unfair clauses in a contract with another company. The rules for consumers are stricter than those for companies, but both enjoy protection. Unfair terms are prohibited and the court can disapply or mitigate them.

Mind you, this is not a unit cake. Depending on how many of the apartments within the VME are intended for professional use or private use, slightly different rules apply. If 75% or more of the apartments are not intended for professional use, consumer rules apply. If 25% or more are intended for professional use, the rules apply to businesses. Whether or not these apartments are for professional use will have to be determined from the bylaws.

It is important to emphasize that these new rules also apply to current contracts. Let this be an invitation to scrutinize existing and new contracts.

Questions? We are happy to help.